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Opportunity cost

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Question 2

A municipal council has a fixed budget of £5 million to allocate to a single local development project. It has narrowed down the choices to three mutually exclusive projects:

  • Project Alpha: Building a community sports complex, estimated to generate 850 units of community welfare.
  • Project Beta: Renovating the public library system, estimated to generate 720 units of community welfare.
  • Project Gamma: Creating a new urban parkland, estimated to generate 640 units of community welfare.

If the council decides to undertake Project Alpha, what is the opportunity cost of this decision?

A

£5 million\text{£}5\text{ million}£5 million

B

1,360 units of community welfare1,360\text{ units of community welfare}1,360 units of community welfare

C

720 units of community welfare720\text{ units of community welfare}720 units of community welfare

D

130 units of community welfare130\text{ units of community welfare}130 units of community welfare

Markscheme

Opportunity cost Questions

  1. A Level
  2. /Economics
  3. /Opportunity cost

10 exam-style questions on OCR A Level Economics Opportunity cost. Each one has a worked solution and a mark scheme showing where the marks go.

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